CFPB Reshuffles Senior Officials in Prelude to Vought’s Exit

The Consumer Financial Protection Bureau is preparing for acting Director Russell Vought’s expected departure later this year by promoting one of his closest aides to be the agency’s second-in-command.

CFPB Chief Legal Officer Mark Paoletta was tapped as the agency’s deputy director, according to a late May 29 staff email obtained by Bloomberg Law. Paoletta, who has operationalized the Trump administration’s efforts to first eliminate and then reshape the CFPB, will retain his post as the agency’s top lawyer.

Paoletta also serves as general counsel at the Office of Management and Budget, according to his LinkedIn profile.

Geoffrey Gradler, who has served as the CFPB’s deputy director since last year, is now the agency’s chief of staff, according to the email.

Vought’s tumultuous tenure at the CFPB is set to come to an end in August, when by law he can no longer serve as the agency’s acting director.

By ultimately making Paoletta the CFPB’s director, the Trump administration can ensure that a loyalist remains atop the federal consumer finance watchdog. Under the 1998 Federal Vacancies Reform Act, a top deputy or other senior official can serve as acting director until a full-time agency head is confirmed by the US Senate.

The CFPB didn’t immediately respond to a request for comment.

Former President Joe Biden appointed Dave Uejio, then the CFPB’s chief strategy officer, to serve as the bureau’s acting director while the Senate considered the nomination of Rohit Chopra to lead the agency on a full-time basis.

Paoletta has been at the center of efforts to lay off most of the CFPB’s staff—at one point as much as 90%—and to upend the agency’s examination, regulatory, and enforcement postures.

With Paoletta serving as the CFPB’s top lawyer, the bureau moved to eliminate most fair lending enforcement by stopping the use of disparate impact, a statistical review of lending outcomes, to bring cases.

The agency also watered down a Biden-era rule mandating the collection of small business demographic data collection.

The CFPB has moved across the board to curtail supervision of financial institutions, including slashing the total number exams and moving to virtual visits from agency staff. The CFPB’s enforcement efforts have largely come to a halt, with dozens of cases dropped under Paoletta and Vought.

The Trump administration’s attempt to shutter the CFPB has been put on hold by courts. The agency is now proposing to cut around half of its existing staff so it can focus on writing rules and defending against legal challenges to new regulations.

The CFPB is awaiting court approval to move ahead with the layoffs and restructuring.